Abstract

ABSTRACT
Asti Nur Afala Sahir, 2013; The Effect of Non Performing Loan And Bank’s Size upon Profitability of Banks measured by ROE, ROA, and NIM on Indonesia Banking Sector Listed on Indonesia Stock Exchange in 2002-2011. The lecturer advisors ; Agung Dharmawan B., ST,MM, and Dra. Umi Mardiyati, M.Si.
The purpose of this study was to determine the effect of NPL and bank size either partially or simultaneously significant effect on bank profitability as measured by ROE, ROA, and NIM. The empirical study in Indonesia is taken from the period 2002-2011. The sampling technique used purposive sampling method. The sample consists of 31 banks. Descriptive statistical analysis of the results showed: the average total banking assets in Indonesia grew rapidly which in 2002 recorded total assets of Rp 27 trillion banking tripled in 9 years to Rp. 88 trillion in 2011 also with the average NPL ever decreasing time by time. This may indicate that the improving Indonesia's banking prudence in managing credit risk. In the performance variables are ROE and ROA significant decrease in 2008, but this did not happen on NIM variables. This is because in the times of crisis, fixed interest payments still run but non-interest income has decline. Data analysis techniques used in this research is the analysis of panel data regression with random effects approach for bank profitability as measured by ROE and ROA as well as fixed effects for bank profitability as measured by NIM which is both based on the Chow test and Haussmann test. Panel data regression results indicate a negative effect on the bank's NPL on ROE, ROA, and NIM. There was no effect on the bank’s Size on ROE and ROA. There is a negative effect on the bank’s Size on NIM in Indonesia.
Key words: profitability (ROE, ROA, NIM), non-performing loans, bank size.